In February, the Texas Public Policy Foundation and Texas Attorney General Ken Paxton filed suit in conjunction with 19 other states in federal court to bring an end to the Affordable Care Act, commonly called Obamacare. The suit was filed four months after the passage of the Tax Cut and Jobs Act of 2018 and four months prior to late Sen. John McCain’s famous thumbs down on the floor of the Senate, essentially rejecting passage of a bill repealing Obamacare.

At the center of the Orwellian-named Affordable Care Act (it has caused healthcare premiums to skyrocket) is the individual mandate, which purports to compel Americans to purchase health insurance or else pay a significant tax penalty (called a “shared responsibility payment”). When it was passed in 2010, many objected that Congress had no authority to compel Americans to purchase a product. Lawsuits were filed, and in 2012 the U.S. Supreme Court ruled that the mandate was constitutional because it was enforced through Congress’s power to tax.

Texas and the other plaintiffs argued that the tax bill, which had eliminated tax penalties associated with the individual mandate, had removed the only constitutional leg the law was standing on; therefore, the entire law was unconstitutional.

On December 14, a federal judge in Texas agreed with the states that Obamacare was indeed unconstitutional and declared the entire law constitutionally invalid.

Judge Reed O’Connor’s decision stood on three pillars that ultimately led to the decision:

1) Do the plaintiffs have standing to bring the case?

2) Is the individual mandate constitutional?

3) Is the individual mandate severable from the rest of the law?

Standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues. Standing consists of three elements: the plaintiffs must have suffered a concrete injury; (2) that injury must be fairly traceable to actions of the defendant; and (3) it must be likely — not merely speculative — that the injury will be redressed by a favorable decision. The court found that Texas and the other plaintiffs satisfied all elements of the standing requirements.

Once the standing pillar was established, it was on to the individual mandate.

According to the court’s opinion, “The question of constitutionality is straightforward: Is the individual mandate a constitutional exercise of Congress’s enumerated powers when the shared responsibility payment is zero? Because the Supreme Court upheld the individual mandate under Congress’s tax power, the court will begin there before proceeding to an interstate commerce clause analysis. The court finds that both plain text and Supreme Court precedent dictate that the individual mandate is unconstitutional under either provision.”

In other words, because Congress exercised its tax power to get the law passed in 2010 and then gutted the tax out of the bill with the passage of the 2018 Tax Cut and Jobs Act, the individual mandate is invalid and outside the scope of Congress’ authority to regulate interstate commerce.

The third and most challenging of the pillars dealt with the issue of severability. When faced with an unconstitutional provision of a larger law, courts often sever out the offending portion while leaving the remaining language intact. “Severability, however, is possible only where ‘an act of Congress contains unobjectionable provisions separable from those found to be unconstitutional.’” In this case, the plain text of the ACA itself, the claims made in Congress by the bill’s authors on multiple occasions, and the Supreme Court decisions made it clear that the individual mandate was the centerpiece of the act and that it could not remain in place in its absence.

This landmark decision will have a significant impact on the healthcare landscape even as liberal states and groups work to appeal it.

Many physicians and physician advocacy groups see O’Connor’s decision as a profound success for re-establishing the doctor/patient relationship that was obstructed by the law, and they are pushing forward with reforms to lower prescription drugs prices and increase transparency in healthcare pricing. Rob Henneke of the Texas Public Policy Foundation echoed the desires of many physicians, saying, “We need to focus on the future and look to states like Texas to lead in restoring the relationship between doctor and patient, unencumbered by government and insurance company red tape. Let’s focus on solutions.”

This is a commentary submitted and published with the author’s permission. If you wish to submit a commentary to the Texas Scorecard, please submit your article to submission@empowertexans.com.

David Balat

David Balat is the Healthcare Policy Director at Texas Public Policy Foundation.

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